Legislature(2007 - 2008)BELTZ 211
02/14/2008 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB183 | |
| SB187 | |
| SB230 | |
| HB233 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 233 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 230 | TELECONFERENCED | |
| += | SB 187 | TELECONFERENCED | |
| = | SB 183 | ||
CSHB 233(L&C)-UNCLAIMED PHONE/ELEC COOP DISTRIBUTIONS
2:07:54 PM
CHAIR ELLIS announced CSHB 233(L&C) to be up for consideration.
DEREK MILLER, staff to Representative Kelly, sponsor of HB 233,
explained that it addresses the sometimes burdensome and
ineffective noticing requirements of unclaimed property law
regarding capital credits of electric and telephone
cooperatives. From time to time these cooperatives receive
excess revenues from its members that exceed the expenses of
operations. They hold funds in member-owned capital accounts
called capital credits (sometimes called "net margins") on
behalf of the member. These coops may refund a portion of these
accumulated credits, but in some cases the cooperative seeking
to refund the capital credits can no longer find the member
through their last known address. As a result, many credits go
unclaimed.
Current unclaimed property law allows the credits to be reverted
back to the cooperative as long as it has mailed a notice to the
last known address at least six months prior to the reversion
and published a notice in a newspaper of general circulation. It
has been found the newspaper notification has not significantly
increased the number of members who cash their capital credits;
as a result the cost of compliance of that part of the law is
significant, while the effectiveness is questionable at best. HB
233 allows cooperatives the option of using the Internet instead
of newspaper publications to notify its members of these
unclaimed capital credits. He noted that Alaska is one of the
most wired states in the nation.
As an example, Mr. Miller noted Alaska Village Electric
Cooperative (AVEC) serves 52 villages and spends many thousands
of dollars to publish in several different newspapers, but they
also have a website where the names of unlocated members are
continuously published.
MR. MILLER said this legislation is supported by the Alaska
Power Association as well as several other rural coops and
individuals.
2:11:07 PM
SENATOR HOFFMAN asked how many newspapers AVEC advertises in.
MR. MILLER didn't know that answer.
SENATOR STEVENS said they are talking primarily about people who
have moved; if they are still customers, it's relatively easy to
locate them. He asked how many people they are talking about.
MR. MILLER said other folks could better answer that. The
problem is that the cost of complying with the law is more than
the actual amounts that are in the accounts.
2:12:27 PM
DARREN SCOTT, CEO, Kodiak Electric Association, supported HB
233. He said the association spends about $4000 per year to
advertise in the newspaper and it's very ineffective. Using the
Internet to contact people works a lot better.
2:13:49 PM
RON VACERA, Director, Member Services, Chugach Electric
Association, supported HB 233. He explained that a lot of
Anchorage people move and Chugach Electric pays capital credits
on a regular basis. It spends about $55,000 annually for
publishing names in the newspaper, and it typically takes up 16-
20 pages in the paper. It ends up issuing 2500 - 3000 checks to
about 15-20 percent of the names listed, which indicates some
success, but a lot are left listed. He said that using the
Internet was much more economical and the list could remain on
line for an extended period of time unlike the newspaper.
2:16:16 PM
ROBERT WILKINSON, CEO, Copper Valley Electric Association,
supported HB 233. He agreed with all the previous testimony in
support of this bill and said they had been advertising for
invalid addresses on their website already for a number of
years. People who work with it have told him it is more
successful than newspaper advertising. He added that a majority
of the Alaska coops use these credits for scholarships for youth
of member owners. Copper Valley Electric over the past 15 years,
had put over $100,000 into scholarships.
2:18:14 PM
MARILYN LELAND, Executive Director, Alaska Power Association,
supported HB 233. She said this process would be more effective
for locating former customers who are owed capital credits. In
addition it would save them and their customers many thousands
of dollars in advertising expense. The current method of
publishing names four times in local newspapers is cumbersome,
expensive and not even terribly effective in most small Alaskan
communities, where even if their names are published, they don't
live there any more and aren't likely to see it.
She said that using the Internet for notice already has some
precedence in Alaska's unclaimed property statutes and that the
Department of Revenue already gives notice to owners of
unclaimed property using an Internet website.
SENATOR BUNDE assumed that the expense of the publishing is
passed on as an operating expense to the consumer.
MS. LELAND answered that was her understanding.
SENATOR STEVENS asked how she tries to contact someone who has
left the community, whose physical address no longer exists, by
using the Internet.
MS. LELAND answered rather than advertising a long list of names
four times there would be a smaller advertisement in the paper
that would direct people to the Internet where they could look
at the names. She mentioned that finding one's name in the
newspaper is a hit or miss proposition, but it would be on the
coops' websites all the time.
2:22:04 PM
RAY CRAIG, Chair, Chugach Consumers and Advocacy Group for
Electric Utility Customers, supported HB 233 for all the
previously mentioned reasons. However he was concerned that it
went too far by not putting any minimum requirements on what
kind of an advertisement the utilities would do. A utility could
possibly bury a fine print ad in the back of the legal notices
of the paper out of the view of the public - in light of the
fact that utilities can keep unclaimed capital credits.
He suggested a possible fix to require a minimum size display ad
four times a year with an attention-getting headline like "Do we
owe you money?" He reminded them that the newspaper advertising
does allow thousands of people to recover their capital credits.
2:25:57 PM
CHAIR ELLIS asked Mr. Miller if he had heard this suggestion
before.
MR. MILLER replied it was new to him, and he offered to work on
it.
CHAIR ELLIS said he would be interested in seeing a CS with a
minimum size ad and possibly a requirement that the utility
collect the email address of the consumers. He held HB 233 in
committee.
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